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Justice Department said Deal would have Led to Higher Advertising Prices in Northwest Arkansas

WASHINGTON, D.C.  Gulfstar Communications Inc. abandoned
its efforts to acquire three Arkansas radio stations from Demaree
Media Inc. after the Department of Justice expressed concerns
that the deal would substantially reduce competition and lead to
higher advertising prices in Northwest Arkansas, the Department
announced today. In addition, Gulfstar said it would notify the
Department's Antitrust Division before making any further radio
station purchases in Northwest Arkansas.

"If Gulfstar had acquired the Demaree stations, small
businesses in Northwest Arkansas would have lost the benefits of
competition--lower prices for their advertising," said Joel I.
Klein, Acting Assistant Attorney General in charge of the
Department's Antitrust Division. "The decision by Gulfstar and
Demaree to abandon this transaction preserves that competition."

In 1996, Gulfstar made a series of radio station
acquisitions in Northwest Arkansas. First it acquired KEZA-FM
from Communications Corp. of America. Gulfstar then signed an
agreement with Noalmark Broadcasting Company to purchase KKIX-FM
and KKZQ-FM, and entered into negotiations with Demaree to
purchase KFAY-AM, KFAY-FM, and KKEG-FM. Gulfstar has been
operating the Noalmark stations under a local marketing
arrangement (LMA) pending consummation of that deal.

The three deals would have given Gulfstar more than 62
percent of the 1995 advertising revenue in the Northwest Arkansas
radio market, the Department said.

Following an antitrust investigation, the Department
expressed concerns that completing all three deals would
substantially reduce competition and lead to higher advertising
prices in Northwest Arkansas. The Department's concerns prompted
Gulfstar and Demaree to terminate their negotiations.

By abandoning its efforts to acquire the Demaree stations,
Gulfstar's share of 1995 advertising revenues in Northwest
Arkansas would be about 48 percent. Gulfstar will continue to
face competition from Demaree, which should intensify since
Demaree has recently upgraded the signal strength of KFAY-FM, the
Department said.

Gulfstar Communications Inc., based in Austin, Texas, is a
holding company that owns or has under contract 30 radio stations
in 11 markets in Texas, Louisiana and Arkansas.

Demaree Media Inc., based in Fayetteville, Arkansas, owns
radio stations in Fayetteville, Fort Smith and Huntsville,
Arkansas as well as Joplin and Springfield, Missouri and
Sallisaw, Oklahoma.

Noalmark Broadcasting Company, based in El Dorado, Arkansas,
owns and operates radio stations in Arkansas and Texas.